U.S. slaps 75% tariff on Korean steel pipes

The U.S. government decided to slap antidumping tariffs as steep as 75 percent on some steel pipes from Korea, which comes as a surprise given its recent decision to exclude Korean steelmakers from the new 25 percent tariffs.

The U.S. Department of Commerce reportedly announced Thursday it would impose 75.81 percent antidumping tariffs on oil country tubular goods (OCTG) made by Nexteel, a major exporter of steel pipes from Korea headquartered in Pohang, North Gyeongsang.

The United States will levy 6.75 percent antidumping duties on OCTG imports from Seah Steel and other Korean steelmakers.

The decision was made as part of an administrative review of an antidumping duty order on OCTG from Korea for the period of Sept. 1, 2015 through Aug. 31, 2016.

OCTG are a type of steel tubes used in oil and gas production. Korea exported about 1 million tons of OCTG to the United States last year worth about $1 billion and Nexteel, Seah Steel and Hyundai Steel were among the biggest exporters of the product.

The tariff announced this week was much stiffer than a preliminary figure from last October for Nexteel.

At that time, Washington assigned preliminary rates of 46.37 percent on OCTG imports by the Pohang-based steelmaker.

The drastic difference was made possible because the U.S. Department of Commerce applied so-called adverse facts available on Nexteel.

The “adverse facts available” clause makes it possible for the Commerce Department to slap extremely stiff duties arbitrarily if it determines the company under investigation failed to respond to its questions properly.

“We had to submit an audit report from 2016, and since it was written in Korean, we had to have it translated before sending it to the U.S. Department of Commerce,” said a spokesperson from Nexteel.

The spokesperson explained the Commerce Department argued about a translation of a specific phrase in the report. The company responded, saying that the translation was done by a professional organization and that the company had no intention of causing confusion with the Commerce Department.

“The Commerce Department didn’t accept our response and decided to slap ‘total adverse facts available’ on us,” the spokesperson added.

After the news broke, the Korean Ministry of Trade, Industry and Energy explained that the duty levied on Nexteel is separate from the 25 percent steel tariffs that came into effect under section 232 of the Trade Expansion Act of 1962.

The decision by the U.S. Department of Commerce comes despite a World Trade Organization (WTO) ruling from November last year involving tariffs on Korean OCTG.

The U.S. Commerce Department imposed 9.9 percent to 15.8 percent in antidumping duties on Korean OCTG imports in 2014. The Korean government appealed to the WTO about the tariff in early 2015. The trade organization eventually ruled in favor of Korea.

BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]